Bank, A Four-Letter Word

Sometime around the time I was a sophomore or junior at UCLA I decided that I wanted to pursue a career in banking.  At the time, I envisioned something along the lines of investment banking.  It was around 1988-1989.  I remember sometime afterwards reading about Michael Milken, Drexel Burnham Lambert and a whole lot of chatter about greed, abuse and other related activities.  It was right about that time that I decided I instead wanted to work for a regulatory agency like the SEC or the FDIC.  I graduated at the tail end of the savings and loan debacle and joined the Treasury Department's Office of the Comptroller of the Currency as a bank examiner.

It was during my time with the OCC that I started to get an understanding of the differences between mega banks (those that are today too-big-to-fail) and "true" community banks.  I will forever be thankful to the OCC for giving me the opportunity to experience examinations at the largest banks in the country as well as the smallest.  These opportunities served to shape my career as a community banker.

If you know anything about "real" community banks you know that they are not run by Wall Street types.  You won't find them having a power breakfast with Donald Trump or meeting with Tim Geithner for dinner.  The CEOs of "real" community banks know banking and they know how their banks can and do best serve the local businesses and families within their communities.  The CEOs of "real" community banks know the owner of the local strip mall down the street and its many tenants.  The CEO of "real" community banks greet you at the little league fundraiser or the local Rotary Club or chaperone at the local high school dance.

So you can imagine how sickened I felt when I read the results of the 2009 Edelman Trust Barometer.  The report found that in no country is trust in a more dismal state than in the U.S., where government, business and media are not trusted to do what is right. But more specifically, in the U.S., in just one year the trust in banks among 35-to-64 year olds dropped nearly in half, from 69 percent to only 36 percent.  And the worst part of it is that no matter how much community banks have done to support local businesses and families, all banks have been painted with the same brush that should be specifically reserved for those banks too-big-to-fail.

Last week, in an attempt to escape banking, I picked up a copy of the recent issue of Sports Illustrated (January 25, 2010).  The cover showed my hero Brett Favre on the cover.  Excitedly, I began reading the issue (note: I have an odd habit of reading magazines from the back to the front...don't ask).  Within two minutes, Selena Roberts in "Coming Clean: It's Complicated" starting taking pot shots at bankers in an article that was supposed to talk about baseball, steroids and Mark McGwire ("He must calibrate his words like an artful banker").  Are you kidding me!  Is there no escape!

Banking was once a trusted and respected business. Bankers were the pillars of their local communities.  No longer.  After Congress rewarded mismanagement and bad behavior by banks and financial institutions that are too-big-to-fail by bailing them out with more than a trillion dollars of taxpayer money the public has become outraged.  Unfortunately, most people and the media never had the opportunity I had to work for the OCC.  They don't know that the differences between "real" community banks and too-big-to-fail mega banks are significant.  Night and day significant.  Black and white significant.  Life and death significant.  Right and wrong significant.

One of the biggest challenges for "real" community bankers, then, is to regain public trust and to make clear to the community that all banks are not cut from the same cloth.  "Real" community bankers must build an understanding that community banks provide not only vital financial products and services but also serve social needs.

Directors, CEOs and senior executives of "real" community banks need to show their communities that they are accountable, responsible and good citizens. They need to show appreciation for being able to continue in business thanks to the patronage of the community. And, they need to continue to show how "real" community banks differ from the too-big-to-fail mega banks.

Stop Acting Like A Bank. You're Embarrassing Me!

As I was paging through the November 2009 issue of Bank Technology News I came across the following news blurb:

"A poll of 18 to 29 year olds in the U.S. funded by Microsoft found that about half feel the banking industry is in touch with their generation; and about 60 percent say their level of trust in financial services has decreased over the past year. When asked how banks can improve trust, 27 percent said blogs would be very important, while 42 percent said it would be somewhat important. And 75 percent were in favor of monthly email updates."

As you can imagine, I was pleasantly surprised to know that we were on the right track when we decided to launch this blog.

I have been a banker for most of my adult life. When I wasn't a banker I was a bank examiner or a bank consultant. As such, banking has been at the center of my professional life for nearly 20 years. During this time I have focused almost entirely on community banking.

Based on my experience, what I can tell you is that community bankers are Main Street, not Wall Street. We coach the local AYSO team, we shop at the local Walmart, we eat hot dogs at the local little league games, we hang out at the local pub and we drive our own cars. And most importantly, we do not single-handedly threaten the viability of the American banking system. Unforunately, the everyday bank customer does not know the difference between a community bank and a big bank




When I started this blog a couple months ago I wanted to share a little bit of the Bank in an informal setting. Along the way I hoped to give readers a glimpse into the "personal" side of the Bank. I hope I am doing that. But more importantly, I hope that readers are starting to see that community banks are more like the corner drugstore than the trillion dollar bank. We TRULY stand behind the community. But more importantly, we thrive only if the local community thrives. So we are fully vested and all in.

Through this blog, therefore, I hope to accomplish a couple things. First, I wish to reach out to the millenials who feel we have no clue. We get it. We know you demand more than what your dad's bank gave you. And community banks are here to let you know we get it. Some of us move faster than others, but we get it.

Second, I hope to show you that community banks make a REAL difference in the community. We may not have the budgets that big banks have but you can always count on us to support the community and its various efforts. We are built around the community, through good times and bad. We don't just close the doors and move to the next town when things get tough. We stay and struggle with everyone else to get things back on track.




So, the next time you need a loan or need to open a new deposit account, ask yourself if having a branch on every corner in every state is better than supporting the local bank that is a part of the local fabric.  And if you're a millenial, feel free to send out a tweet about it.